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Economic analysis and financial modelling in the petroleum industry Duration: 1 Week/s

Course Information

  • Course Price £4995 Plus VAT
  • Location UK Courses
  • Course Code EAFM
  • Course Date 16 Feb - 20 Feb 2026

Course Objectives

In an industry where single project decisions involve billions of dollars and decades of commitment, robust economic analysis and financial modelling are fundamental to success.
Petroleum professionals must evaluate exploration prospects, development options, and production strategies under profound uncertainty about commodity prices, reservoir performance, and regulatory environments.

This intensive 5-day programme equips participants with the quantitative tools and analytical frameworks essential for rigorous project evaluation and investment decision-making.
Through case analysis, hands-on modelling exercises, and practical workshops, delegates master financial techniques specific to petroleum economics.

Participants learn to build decision-grade economic models, conduct sensitivity and risk analysis, and communicate financial recommendations to executives and boards effectively.



Who Should Attend?

Reservoir Engineers and Petroleum Engineers requiring economic evaluation skills. Production Engineers evaluating optimization investments and enhanced recovery projects. Commercial Analysts and Advisors supporting investment decisions Strategic Planning Professionals conducting portfolio analysis. Financial Analysts and Controllers in upstream, midstream, or downstream operations. Planning and Economics Professionals building corporate forecasts. Project Managers requiring business case development skills. Asset Managers optimizing field development and production strategies. Engineers transitioning into commercial or business development roles. Professionals preparing for management positions requiring financial acumen.


Prerequisites

None



Course Overview

Petroleum Project Economics Fundamentals

  • Delegates will master the unique characteristics of petroleum economics including long project timelines, high capital intensity, reservoir uncertainty, and price volatility.

  • Participants will understand revenue drivers, cost structures, and value creation mechanisms across exploration, appraisal, development, and production phases.

    • Discounted Cash Flow Analysis and Investment Metrics
  • Participants will apply NPV, IRR, payback period, and profitability index to evaluate petroleum projects.

  • Delegates will understand discounting principles, appropriate discount rates for petroleum investments, and the interpretation and limitations of each metric.

    • Building Petroleum Project Financial Models
  • Delegates will construct integrated financial models incorporating production profiles, capital expenditure schedules, operating cost estimates, and abandonment costs.

  • Participants will learn Excel best practices, model structure, and documentation standards for decision-grade financial analysis.

    • Petroleum Fiscal Regimes and Government Take
  • Participants will analyse different fiscal systems including concession/royalty-tax regimes, production sharing contracts, and service contracts.

  • Delegates will calculate government take, contractor entitlements, and how fiscal terms impact project economics and investment decisions.

    • Risk, Uncertainty, and Decision Analysis
  • Delegates will apply probabilistic methods including Monte Carlo simulation to model geological, technical, and commercial uncertainties.

  • Participants will conduct sensitivity analysis, tornado charts, and spider plots.

    • Production Forecasting and Decline Curve Analysis
  • Participants will develop production profiles using decline curve analysis, type curves, and material balance methods.

  • Delegates will understand how production forecasting uncertainty impacts project economics and the relationship between reserves and economic value.

    • Capital and Operating Cost Estimation
  • Delegates will estimate capital costs using factored estimates, capacity-based models, and benchmarking.

  • They will understand cost escalation, contingency, and the difference between budgets and economic estimates.

    • Portfolio Optimization and Capital Allocation
  • Participants will apply portfolio theory to petroleum investments including project ranking, capital rationing, and resource allocation.

  • Delegates will balance risk and return, evaluate portfolio diversification, and make trade-offs between exploration, development, and production investments


    • Course Materials

    Notes, handouts and exercise materials

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